DTC 59: 📦 Which subscription model are you?
May 21, 2023
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Saturday May 29th, 2021

I hope your weekend is off to a smashing start!

But just think about how cool you’d feel reading today’s DTC newsie on a brand new MacBook you won in our referral contest.

Make sure to grab your link and share it far and wide 👇:


We’ve had hundreds of referrals come in, but your odds are still quite good, especially if you refer more than one person to double or triple your chances.

If you won, you’d probably feel at least as cool as this young fellow recording an ad for an Apple computer in the 90’s.

Did you know that this guy, Brent Rambo, now works for Facebook as the company's director of network engineering and infrastructure?

Small world. Maybe Brent can get Tim Cook and Mark Zuckerberg to be a little nicer to each other. 😅

Keep reading this newsletter for:

📦 Five reasons why you should be jumping on eCommerce subscriptions.

📦 How to provide a VIP experience for your loyalty members with SMS.

📦 The Pilothouse team on how to "TikTokify" your ads.

📦 Level up your marketing skills with the help of real experts at DTC Day.


Even before a global pandemic brought the world to a screeching halt, subscription eCommerce has seen rapid growth.

While online shopping reached an all-time high, with 900 million more digital buyers in 2021 vs. 2020, SUBTA predicts 75% of DTC brands will offersubscriptions by 2023.

On top of this, global eCommerce subscriptions will make up 18% of the total market share.

Benefits of Subscriptions for eCommerce

  1. Predictable Revenue Stream: Subscriptions can help keep your cash flows healthy even in times of market fluctuation.

  2. Easier Inventory Management: Since businesses already know how many subscribers they have, procuring and stocking a precise amount becomes more efficient.

  3. Reduced Customer Acquisition Costs: As the famous statistic goes, it’s five times cheaper to retain an existing customer than acquire a new one.

  4. Customer Base: Subscriptions are an opportunity to build long-term relationships with customers and also present opportunities to expand revenue by up-sells and cross-sells.

  5. Brand Strengthening Opportunities: Regularly delivering products to subscribers creates several touchpoints and opportunities to strengthen your brand association and improve advocacy.


Give your loyalty members the VIP treatment with SMS marketing

Loyalty members expect a higher level of exclusivity and personalization from your customer experience, and SMS marketing makes that easy to deliver.

SMS messages have the power to engage loyalty members at every stage of their journey from point accrual, to unlocking exclusive offers, or reaching a new VIP tier.

Each step can be customized to fit every unique personality, preference, and purchase behavior.

This way, you can send the right text at the right time to the right customer, building revenue-driving relationships as you go.

Let’s look at the numbers: 👀

📱 63% of loyalty members are already signed up to engage with brands via SMS.

🚀 76% of loyalty members want to sign up to receive text messages.

💰 80% of consumers say they’d be even more loyal to brands that delivered tailored experiences.

With Yotpo’s combined SMS and loyalty solutions, your brand can rise to meet this consumer demand today.

👉 Check out these three ways you can combine SMS and loyalty to drive retention.


Let’s dive into the different types of Subscription Models

Replenishment Business Model:

A replenishment subscription allows customers to buy essentials and consumables on repeat. Categories that benefit from this model include toiletries, groceries, pet food, vitamins, etc.

Dollar Shave Club is an excellent example of this model.

Since this model puts replenishables on autopilot, it has the advantage of higher retention rates.

However, making these subscriptions valuable to consumers means giving a lot of discounts, resulting in lower profit margins. But the higher volumes often offset lower margins.

Curation Business Model:

The curation model is probably the most well-known application of subscriptions in the DTC and ecommerce world.

It includes providing a collection of products and services personalized to the customer’s preferences.

Birchbox is a great example. Customers receive a handpicked collection of products in categories selected by them.

Subscribers look for highly personalized product curation, and they’re prepared to pay a premium price.

However, retaining customers can be a challenge and a brand should be prepared for additional expenses with creative packaging and personalized touches.

Access Business Model:

Just as the name suggests, subscribers pay a membership fee for access to an exclusive community or early access to products.

NatureBox sells organic and healthy food options and follows this model. Notice the "member discount" on each item 👇

If subscriptions is a topic you’re interested in learning more about, reply to this email and let us know!


🧐 Looking for some quick wins in your Facebook ad account?

Take your top-performing campaign and duplicate it with a 1-day click, 1-day view attribution model.

Facebook pools 7- and 1-day audiences differently so you can see a strong lift simply by duplicating and changing the attribution window.

This strategy is easy to implement and something that buyers don’t always think about. Get on it!


Getting started on TikTok?

Here’s your beginners’ guide!

Join Eric and Pilothouse media buyers Spencer Hay and Nikita Pickard as they go over the basics of advertising on TikTok ads.

Our main takeaway? Don’t make ads, make TikToks.

One way to do this, is to modify or "TikTokify" your existing creative:

  • Convert tested winners from Facebook from a 1x1 ratio to a 9:16 ratio.
  • Use upbeat audio, or audio that’s trending on the platform.
  • Use lots of quick cuts to keep the attention of the TikTok audience.

🤳 Tip: Go onto the TikTok app, record a video, and add a piece of text to the video.

Then use the "text to voice" feature. Download, then use that "text to voice" audio on top of your creative edit.

This will grab attention on TikTok and feel organic to the platform!

🎧 Listen to the full pod for:

📦 How to think about the platform

📦 TikTokify your existing ads

📦 Why TikTok is a platform you need to be thinking about already

Tool Spotlight

Level up your marketing skills and grow your DTC business with the help of real DTC experts.

Join marketers from Facebook, Snapchat, Harry’s, Quip, P&G, Glossier, and Bonobos to learn brand-building secrets from DTC experts who have gained traction in some of the most competitive markets.

Nik Sharma, Ezra Firestone, and Nick Shackelford are among the 100+ DTC legends speaking at DTC Day.

👉 Check out the action-packed schedule and sign up here – as a DTC reader you’ll receive $50 off your ticket purchase!

(While DTC Newsletter isn’t affiliated with DTC day, we are BIG fans of the conference. 😎)

Creative of the Day

Check out this eye-catching creative from vitamin and supplements brand, Ritual:

Any time you’re "re-imagining" a product, include your exact ingredients to build credibility with your audience.  

This ad does a great job of taking something super familiar (protein powder) and repositioning it with higher quality ingredients.

The animation is simple and stark, and draws the eye nicely.

Notice the words that fulfill the promise of re-imagination: "plant-based," "handcrafted," "clean," "sugar-free," and "complete."

Wait, are my amino acids not complete? 😕 Better grab some.

Bonus points for the scoop pun! 😬

DTC Brand Spotlight

Spark Grills is a DTC brand that launched last summer.

The Rundown: Spark makes charcoal barbecues that are as easy to use as gas grills.
  • Made of hardwood charcoal
  • Ignites faster than traditional charcoal
  • Holds temperature exactly where you want it

Price: $899-$999

Check it out: 👀👇

Spark was spotted on ThingTesting, a place to discover new DTC brands!

DTC Macbook Pro Giveaway

Ok, team! You know the drill!

Share DTC Newsletter with your referral link, and you AND the friend you refer are automatically entered to win a brand new Macbook Pro.

One referral = one entry to win. More referrals = more entries!

Your Unique Link: http://directtoconsumer.co?utm_source=sparkloop&utm_medium=newsletterplacement&rh_ref=1ed4b700

May the odds be ever in your favor. 😎

M & A

🎥 Amazon buys MGM for $8.5 billion.

▶️ Vimeo Stock Slips 13% in debut as public company following IAC spinoff.

👩‍💻 Fireflies.ai puts $14M into its AI videoconferencing assistant.

🥿 DTC shoe brand Birdies has 300% year-over-year growth in April 2021.

🚲 Peloton to invest $400 million to build its first U.S. manufacturing facility in Ohio.

🏈 New York Times in talks to buy subscription-based sports website The Athletic.
👖 Authentic Brands – which owns Juicy Couture, Brooks Brothers, Aeropostale and Forever 21 – is targeting a $10B IPO valuation.

🔊Have you heard our latest podcasts?

🤩 Three Ships' Lillie Sun on Clean Beauty, Agile Bundling, and Aging Up Your Brand

🛒 Olipop's Eli Weiss Goes Deep on Customer Experience

📱 How to "TikTokify" Your Ads with Pilothouse's Spencer Hay and Nikita Pickard

DTC Newsletter is written by Thomas Schreiber, Eric Dyck, Sadie Evans, and Nupura Ughade.

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